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Because of ethanol, the price spread between regular and premium gasoline is narrower percentagewise than it once was, according to the Energy Information Administration. Americans paid an average of $3.52 per gallon of regular unleaded gasoline Tuesday, compared with $3.85 per gallon of premium, a report by AAA showed. According to EIA figures, the percentage spread in 2001 was much larger, at about 17%. "As the percentage of ethanol in gasoline grows, higher octane blendstock becomes relatively cheaper," the EIA stated.

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Contrary to claims from the oil industry that consumer demand for ethanol is falling, recent Energy Information Administration data show that ethanol blending by U.S. refiners and blenders reached an all-time high in 2014, totaling 13.32 billion gallons. Meanwhile, the calculated amount of ethanol inclusion in gasoline reached 9.74% in 2014, up from 9.62% in 2013.

Ethanol production last week was at an average of 921,000 barrels per day, or 38.68 million gallons per day, according to the Energy Information Administration. The figure was down 9,000 barrels per day from the previous week.

In the Midwest, E85 is increasingly able to compete with regular gasoline in terms of mileage per dollar, the Energy Information Administration said. The recent jump in Renewable Identification Number prices is adding to E85's price discount relative to regular gasoline because producing E85 creates more RINs than E10, benefiting producers who pass on the extra RINs to consumers in the form of lower prices, the agency said.

U.S. oil production in the first week of January was 7 million barrels per day, up 19% from a year ago, while ethanol production was down nearly 14% to 826,000 barrels per day, according to data from the Energy Information Administration. After strong returns in 2011, ethanol profit margins declined sharply in 2012, mainly due to the elimination of the Volumetric Ethanol Excise Tax Credit and reduced overall demand for gasoline, the data showed. Strong demand for distillers dried grains with solubles and corn oil helped boost margins for some ethanol producers, the data showed.

High gasoline prices are expected to lower demand this summer, but not enough to push the price down, the Energy Information Administration says. The agency predicts that oil prices will average $126 per barrel next year while retail gasoline will average $3.92 per gallon. It expects oil to drop to $86 per barrel in 2010 and bounce back to $107 by 2015.